Sharply dressed in a pressed navy suit and blue striped tie, he speaks boldly of his new investment venture – a $22-million, 60,000-square-foot manufacturing facility tucked away on Vancouver Island.

It’s heavily guarded round-the-clock by 72 CCTV cameras and a full roster of security officers overseen by a former RCMP drug enforcement specialist. And rightfully so — there is something very valuable within those concrete and steel walls.

Though he may not fit the typical Cheech and Chong image, Christian Groh is a medical marijuana dealer. And business is booming.

Groh and business partner Brendan Kennedy first met as co-workers at Silicon Valley Bank, famous for backing companies such as Facebook, Twitter and Tesla, and started an evaluation group there to follow trends. The pair, along with another business partner, have raised more than $22 million and are set to close on another $50 million to $75 million in private capital this summer through Privateer Holdings, a private Seattle company that invests in the legal cannabis business.

Using that money, they began Tilray, one of only 13 Canadian companies that has authorized “licensed producer” status from Health Canada that allows them to grow, sell and distribute medical pot.

“The walls of prohibition are coming down,” explained Groh. “We started looking at this four years ago and it operates on so many different levels — it’s medical, it’s legal, it’s social, it’s political and financial. Not many other industries can hit all those tenants, which is interesting to me. We have an opportunity to build a $1-billion company and a multibillion net new sector.”

Since the fall, the federal government imposed new rules on medical marijuana to cut out what officials say are “abuses in the system” and shut down home-grown production.

Any new patients permitted to smoke weed for medical purposes now have to get their prescriptions filled at a designated licensed producer approved by Health Canada — such as Tilray.

The plan, as of April 1, was that Health Canada would no longer license users or distribute marijuana — however, in March a federal court judge ruled the old program could continue, meaning those who were grandfathered in the old system were still allowed to grow their own plants unless the decision is overturned.

Health Canada is appealing the decision.

Meanwhile, the new system is running full steam ahead.

Tilray, which received their full licence as a producer April 16 and sent out the first shipment about two weeks later, currently manufactures strains of marijuana designed to treat different ailments — everything from chronic pain, to anxiety and stress, to seizure disorders.

The Tilray “fortress” has nine-inch-thick walls with rebar of at least six inches. In the centre, the growing facilities are encapsulated in a secure vault that Groh describes as “a bank inside a prison filled with toasters we’re trying to cool down.”

Within the 39 growing rooms, there are currently more than 10,000 marijuana plants in production using 13 strains on the menu. There’s a potential of increasing the strain count to 80 in the future. A full capacity of 40,000 plants — equivalent to roughly 15,000 pounds — means the ability to fully treat 5,000 patients.

“It’s not like this is vapour,” Groh said. “These are real economics. It’s a function of taking dollars from a black/grey market and moving it into a real, legitimate, regulated medical market. That’s the first time in modern history. No other sector has emerged like this.”

Philippe Lucas, the vice-president of patient research for the company, said among some of the 1,000 patients they gained in the first seven weeks of operation was a former RCMP officer named Maria, who was injured in the line of duty.

“When she came to us, she’d only tried it a few times. She became our first patient. We officially shipped it to her on the day of our launch,” Lucas said.

“She suffered a severe neuromuscular injury to her hand and so she had lost, according to her, 60% of the use of her hand. Since the use of cannabis, she’s been able to gain a lot more use, her life has significantly improved, she’s able to give up use of opiates altogether and, basically, gain her life back.”

Some of the best-selling strains include Cannatonic, a high CBD (cannabidiol) strain to treat seizure disorders, or used as an anti-inflammatory to treat chronic pain, and Bubba Kush, one of the strongest products at 23% THC (Tetrahydrocannabinol), that helps with severe chronic pain, stress and anxiety.

“There’s no one strain that seems to be the perfect fit for all conditions for all patients under all circumstances,” explained Lucas, who himself started out as a cannabis patient in 1995 when he was diagnosed with hepatitis C through tainted blood and later turned into a cannabis researcher.

“So right now, for example, we have three different main varieties we’ve broken our strains down into. For patients, it’s been incredible. For those who want to find the relief of cannabis without the intoxicating effect, it’s been a great alternative.”

The new changes also mean patients get easier access to their prescription without the red-tape bureaucracy, reducing a 33-page application to a simple doctor’s recommendation for cannabis use. Patients used to have to wait between six weeks to six months to get their medicine.

“Now, you can walk into your doctor’s office and walk out a legally authorized medical cannabis patient,” Lucas said. “We have doctors that can sign up patients on our website without sending in any paperwork. So from a patient point of view, that is a huge boon.”

According to Health Canada, as of June 16, there were 920 applications for producer licences in the system — 163 of them refused, 296 are being reviewed, and only 20 licences issued so far. Of those 20 licences, only 13 can grow and sell. The other six can grow only and one was inspected and violated the rules.

There are 37,800 people who hold an authorization to possess in Canada, according to the agency.

And while Groh acknowledges smoking medicinal weed still gets “a bad rap,” the stigma is easing up in Canada. He has looked at Colorado and Washington — both which have relaxed marijuana laws — and felt it was too risky to start up business there.

“It’s still federally illegal (in those states) — there’s still risk and it’s still pretty raw in that space,” he said. “The Drug Enforcement Administration can come in at any time, break down your door, seize and you can get arrested.”

The process to apply for a producer licence is gruelling, Groh said, and they must make sure all checks and balances are in place with their operation. They also want consumers to know that they’re not out to gouge them.

“With the amount of money we’ve invested, we know we’re not going to make that back in the next six months,” he said. “It’s going to be something we’re involved in for years to come. Every plant is counted, every seed is counted. Every package that goes out the door is locked into a regulatory system. There’s verification process from doctors to patients through our sales medium.”

As Tilray perfects its business model, the company is hoping to break ground on a second facility later this year, possibly in Ontario.

It’s planting yet another seed in the future of the medicinal marijuana business.

“I think over time, as we start to treat cannabis as a natural plant rather than plutonium, we might be able to see a loosening of the regulations that ultimately may lead to easier access,” Lucas said.

FACTS ON TILRAY

Tilray was co-founded in 2014 by entrepreneurs Brendan Kennedy, Christian Groh and Michael Blue and is based on Vancouver Island, B.C. It is one of Health Canada’s approved licensed producers of premium, pesticide-free medicinal cannabis.

The $22-million, 60,000-square-foot facility is located in Nanaimo. The facility is made of steel and concrete and has nine-inch-thick walls with rebar of at least six inches. A vault is at the centre containing 39 growing rooms.

Other security for the facility includes 72 security cameras and a full line of security guards led by an ex-officer of intelligence at the RCMP.

Tilray received its preliminary licensed producer approval from Health Canada on March 25 and received its full license on April 16. The company’s first shipment date was April 28.

There is currently more than 10,000 plants in production, with 13 strains on their menu right now and the goal of having roughly 80 strains in the near future.

The medicinal marijuana produced in the facility is equivalent to about 15,000 lbs. and can treat 5,000 patients using 40,000 plants in cultivation. Many of these patients have chronic pain.

According to Health Canada, 37,800 people hold an authorization to possess medicinal marijuana in Canada.

There are four different categories of marijuana Tilray manufactures: Indica, known for its calming effects and is commonly used to relieve inflammation, glaucoma, arthritis and muscle tension; Sativa, which has stimulating properties, and is generally good for energizing daytime use, can reduce migraines, pain and nausea and help stimulate appetite. Hydrid is a mix of Indica and Sativa with one or the other dominant and can yield “the best of both worlds.” High CBD is bred to emphasize the therapeutic effects of CBD, such as reducing inflammation, muscle spasms and insomnia, and its euphoric effects are milder.